Friday, April 30, 2004

Apple Misses Music Sales Goals as Pepsi Promo Fizzles

Apple Misses Music Sales Goals as Pepsi Promo Fizzles "On the first anniversary of the launch of its iTunes Music Store, Apple announced that it has sold 70 million songs online, a tremendous achievement for such a nascent market, but far below the 100 million songs that CEO Steve Jobs promised. Furthermore, Apple's high profile song giveaway promotion with Pepsi has been a complete flop: Only 5 million songs have been redeemed, far fewer than the 100 million that have been circulated.
"iTunes has exceeded our wildest expectations during its first year," Jobs said, in a bit of hyperbole, given the 30 million song shortfall and the Pepsi debacle. Apple also quietly began retreating on its anti-Microsoft technology bent, adding support for Windows Media Audio (WMA) to iTunes 4.5, a new version of the player the company released yesterday. With the new version, iTunes users can't play WMA songs directly, but they can morph them into Apple's AAC format, and the resulting songs will play on Apple's hugely successful iPod (and iPod Mini, if you're on of the lucky few that got one).
...
Despite the missed goals, it's impossible to underscore the important and far-reaching effects that iTunes has had on the music and consumer electronics industries. In a way, it's a shame that Jobs had to brag about the success he expected to achieve with the service, because iTunes, in fact, been hugely successful with an amazing number of songs sold. That misplaced bravado, the Pepsi debacle, and Apple's downplaying of markets for which it has no solution, suggest the company isn't prepared to innovate the next big consumer electronics push. And that's a shame: A video iPod with subscription services capabilities would have surely kept the Microsoft camp on the sidelines yet again."